Mass. insurance costs again listed as most expensive in the nation

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Some health policy analysts and provider groups cheered last year when results from a 2010 national survey of employers showed that Massachusetts no longer had the most expensive health insurance coverage in the country. But the latest survey data show that the family plans offered through Massachusetts employers once again cost more, on average, than in any other state.

“I’m not surprised,” said John McDonough, director of the Center for Public Health Leadership at the Harvard School of Public Health.

The idea that Massachusetts fell so dramatically last year in relation to other states was “wacky,” he said. “It’s a cautionary tale, in terms of never taking too seriously statistical news that shows such a sudden shift in either direction.”

The average family premium in 2011 was $16,953
, including what both employer and employee pay. That’s about 16 percent higher then the 2010 average, $14,606. Meanwhile, the national average increased about 8 percent.

Because the data are based on a survey sample of employers -- and not more complete market reporting -- the figures may not accurately reflect year to year changes in state averages and there may be little actual difference between costs in Massachusetts and other expensive states, such as New Hampshire, where the family average was $16,902. Plus, the sample is not made up of the exact same employers each year, which could account for some of the variation over time.

Last year, as the debate on Beacon Hill about how to control health costs heated up, provider groups and others said the 2010 federal data and a Commonwealth Fund report analyzing it showed that the market was already regulating itself.

Lynn Nicholas, chief executive of the Massachusetts Hospital Association wrote on the group’s website in November that the change was “a great start.”

“It’s also evidence that the market’s efforts to slow the cost of health care increases are working, and that government intervention in price regulation would be premature,” she wrote.

Several prominent health policy experts, including McDonough and Sarah Iselin, president of the Blue Cross Blue Shield of Massachusetts Foundation, raised doubts then about the numbers.

The national survey is generally thought of as a strong measure of premium trends, said Nancy Turnbull, senior lecturer and associate dean at Harvard School of Public Health. But, she said, at the state level, the survey results have too much volatility to be trusted.

For example, the average premium cost at the largest employers, those with 1,000 employees or more, decreased 9 percent in 2010 and then increased 22 percent in 2011.

The double-digit increase in 2011 prices in the survey doesn’t correlate with what seems to be happening in the insurance market, with carriers holding costs down and negotiating new contracts with doctors and hospitals, said Michael Widmer, president of the Massachusetts Taxpayers Foundation.

“There’s a lot of other evidence that we slowed the rate of growth of costs,” Widmer said. “So this report was one piece of a much larger picture.”

Another factor to consider in looking at premium costs -- to get a sense of affordability and regional variations in wages for health professionals -- is how they compare with a state’s median income. Massachusetts fares well in that equation because incomes in the state are high, said Cathy Schoen, senior vice president of the Commonwealth Fund, which plans to release an updated report next month.

Schoen said people with employer-sponsored plans in Massachusetts also may have better coverage than those in other states. Single individuals with employer plans in Massachusetts have an average deductible of $1,000, compared with a national average of $1,123, for example.

Still, Schoen said, “underneath all of this is, the care system just has to change or our premiums won’t slow down.”